Sunday, January 19, 2014

Obamacare: CGI Out, Accenture In

The First Lady's buds at CGI are on the street after taking some $600 million or so of our

money. They are replaced by Accenture that won a "no bid" contract for $91 million of our money.

CGI was let go was because the government had no confidence that the company could affect the changes necessary to get the payment system up and running in time to avoid disaster.

P J MediaNo confidence.Many have similar feelings about this administration and their ability to do anything right. But I digress . . .The change is made to avoid disaster. That's like the captain of the Titanic ordering "Hard to port" after the ship struck the iceberg on the starboard side.

“There is limited time to build this functionality and failure to deliver…by mid-March 2014 will result in financial harm to the government,” the document says.

“If this functionality is not complete by mid-March 2014, the government could make erroneous payments to providers and insurers,” it continues. “Additionally, without a Financial Management platform that accounts for enrollments and associated program costs that integrates with the existing CMS Accounting platform, the entire healthcare reform program is jeopardized.”

Seriously?They put forth a trillion dollar plus tax law that relies on Chinese funding but are just now concerned about financial harm to the government?Give me a break.

failure to complete the project by mid-March could result in “inaccurate issuance of payments to health plans which could seriously put them at financial risk; potentially leading to their default and disrupting continued services and coverage to consumers.”

Many of the newly minted insureds are already racking up medical bills faster than a high school student with mom's credit card. The carriers need all the premium dollars they can round up to pay these bills and even that may not be enough.

the system is vulnerable to “inaccurate forecasting” of the risk mitigation programs in place to pay insurers who enroll a higher-than-expected number of sick patients with expensive bills, “potentially putting the entire health insurance industry at risk.”

Time to reflect on what has happened thus far.Back in the dark ages, before #Obamacare, carriers were in the risk management business. They were allowed to evaluate each risk and price accordingly or refuse to insure the individual if the required premium exceeded state limits.Enter Obamacare and suddenly carriers are now cash flow managers instead of risk managers. Their job is to find a way to fund 10 Essential Health Benefits while at the same time issuing a health insurance policy to anyone who can fog a mirror. Prices are no longer based on gender or health but now must follow a community rating formula that tracks the cost of health care for a defined geographic area and use that to develop a premium rate.What if this approach was used for home owners insurance? Everyone in my zip code where the average price of a home is in the $280,000 range would pay the same price. It would not matter if you lived in a $5 million "mansion" or a $45,000 loft condo, everyone pays the same premium. Further, all home owners policies would include liability coverage for a swimming pool and replacement coverage for a home theater whether you had one in your loft condo or not.

Accenture will also have to clean up some aspects of the project that CGI failed to complete, such as the notorious 834 enrollment transmissions to insurance companies that in October and November were transmitting inaccurate and garbled data.

With a mid-March deadline less than 60 days away you have to wonder if this Herculean task is even possible. Build a back end payment system from scratch while cleaning up the mess from the failed $600 million dollar website.

Of more interest is the “drop dead” date for Obamacare. Is it routine for bureaucrats to be overly dramatic in tasking a contractor, exaggerating consequences for failure? I can think of no reason why a procurement document would employ such a tactic, which leaves us with the very real possibility that Obamacare is in deep, deep trouble regardless of who signs up and how many.

Obamacare Open Enrollment Phase II ends on March, 31, 2014.Or does it continue for all of 2014?Stay tuned.One could term this a Chinese fire drill but since we are reliant on red China to fund this mess perhaps we should refrain from insulting them.Perhaps Larry, Moe and Curly is a better choice but the morons, imbecile's and nitwits of the world might be equally insulted.